Information from the Office of Insurance Regulation re Kevin McCarty re Flood Insurance 5/19/06

Please find below a letter from Insurance Commissioner Kevin McCarty regarding flood insurance. Should you have any questions or concerns, please do not hesitate to contact me.

Regards,

Fred E. Karlinsky

I believe this is an important message for your readers as we approach hurricane season. If you have any questions you can reach me through my communications director Bob Lotane at 850-413-2515.

Thank you, Kevin McCarty

Insurance Commissioner, state of Florida

Whether it is due to the deluge of rain in New England, or the sad aftermath of Hurricane Katrina, the issue of flood insurance is once again in the national spotlight. As our state is perched on the precipice of another hurricane season, I strongly urge Floridians to consider purchasing flood insurance to protect their homes.

One of the tragedies of Hurricane of Katrina was that many policyholders were unaware that flood damage is not covered by homeowners policies. Buying flood insurance, through the National Flood Insurance Program (NFIP), is easy, affordable, and provides an extra layer of security in the event of a catastrophic event.

During the aftermath of Hurricane Katrina we learned that up to 80% of properties damaged in Mississippi, and 60% of properties in low-lying New Orleans did not have flood coverage. Fortunately, Floridians are more prepared. In Florida nearly 34% of Florida�s homes do have flood insurance, but that still leaves two-thirds of families without this protection.

The important thing for Floridians to consider is to purchase flood insurance now. Waiting until there is a major storm in the forecast is too late, as usually there is a waiting period before flood coverage becomes effective. Floridians may be surprised to learn that most flood insurance policies are reasonably priced costing less than $450 a year in the flood zones and less than $300 a year outside the flood zones � a very good deal when you consider the alternative.

I want to continue to stress that even people outside of the flood zones need this coverage. A recent Rand Corporation study reported that one-third of all floods occurred outside standard flood hazard areas; however, only one percent of people outside the flood plains buy insurance. It is true that I have been a long-standing advocate of updating outdated flood zone maps used by the National Flood Insurance Program as many people have homes at greater risk than they realize.

The good news is that Congress is attempting to address this problem, and has passed several bills including a provision that appropriated $750 million for flood map modernization, as well as provisions that raised the coverage limits. With the new legislation, Florida consumers are able to purchase flood insurance for up to $335,000 in property damage, and $135,000 for personal contents.

When it comes to preparing for the storm season, I like to remind Floridians of Benjamin Franklin�s famous saying, “An ounce of prevention is worth a pound of cure.” Please remember this adage as you are preparing your homes for the upcoming hurricane season.

Information about the National Flood Insurance Program can be found at the Federal Emergency Management Agency�s website at: http://www.fema.gov/nfip.

Sincerely,

Kevin McCarty

Insurance Commissioner, state of Florida